The district court found that Hyundai had "waived its right to JMOL on
anticipation and obviousness because it failed to make a sufficiently specific
pre-submission motion under Rule 50(a)," but the CAFC overturned that.

Anticipation

On JMOL, Hyundai had argued that the evidence presented to the jury
established that the '627 patent was anticipated by prior art electronic
parts catalogs, specifically the Bell & Howell IDB2000 system. Bell & Howell
developed and sold the IDB2000 system in 1987. Under a 1987 distribution
agreement between Bell & Howell and Reynolds & Reynolds, the latter
distributed and supported the IDB2000 electronic parts catalog under the
Reynolds & Reynolds PartsVision private label. The IDB2000 system, as
described in a Reynolds & Reynolds promotional publication entitled
"Electronic Parts Catalog," was identified as an automated system for the
sale of parts that allowed salespersons to sell parts faster and with more
accuracy.

Under 35 U.S.C. § 102(b), a patent is invalid as anticipated if "the
invention was patented or described in a printed publication in this or a
foreign country . . . more than one year prior to the date of the
application for patent in the United States." Although § 102 refers to "the
invention" generally, the anticipation inquiry proceeds on a claim-by-claim
basis. See Hakim v. Cannon Avent Group, PLC, 479 F.3d 1313, 1319
(Fed. Cir. 2007).

Whether a document constitutes a printed publication under § 102 is a
question of law based upon the underlying facts of each particular case.
Cordis Corp. v. Boston Scientific Corp., 561 F.3d 1319, 1332-33 (Fed.
Cir. 2009). Here, to qualify as a printed publication, the Electronic Parts
Catalog promotional publication must have been disseminated or otherwise
made accessible to persons interested and ordinarily skilled in the subject
matter to which the advertisement relates prior to the critical date. See
Kyocera Wireless Corp. v. Int'l Trade Comm'n, 545 F.3d 1340, 1350 (Fed.
Cir. 2008); In re Hall, 781 F.2d 897, 899 (Fed. Cir. 1986)
(explaining that public accessibility is the "touchstone in determining
whether a reference constitutes a 'printed publication' bar under 35 U.S.C.
§ 102(b)"). The critical date is defined as the date one year prior to the
filing date of the patent application. Constant v. Advanced
Micro-Devices, Inc., 848 F.2d 1560, 1568 (Fed. Cir. 1988).

Orion argued that the prices were for wholesale vendors, not "customers," but
the CAFC blew past that as reading into claim 1 a limitation non-extant.

The evidence also required JMOL on dependent claim 7 that states the
additional element of "price information." It is undisputed that the IDB2000
system generated price information; the only question was whether the price
information was "intended for conveyance to a customer" because it revealed
a markup. Again, the claim did not specify what type of price information
was intended for conveyance to a customer. It is unquestionable that
wholesale customers would be interested in the wholesale price as well as
the retail price. Moreover, any salesperson would have known the advantages
of conveying only the retail price to a retail customer.

With regards to dependent claim 8 that requires "graphical information,"
because steps 7 and 9 of the IDB2000 system required selecting appropriate
illustrations and the Electronic Parts Catalog reference showed large screen
shots of part diagrams as examples, it is clear that the IDB2000 system
allowed both the customer and the salesperson to see graphical information.
Therefore, dependent claims 7 and 8 are also anticipated by the Electronic
Parts Catalog reference.

Thus, the record reveals that a reasonable jury would not have a legally
sufficient evidentiary basis to find that the claims at issue were not
anticipated.

Inequitable Conduct

To prove inequitable conduct, Hyundai must provide clear and convincing
evidence of (1) affirmative misrepresentations of a material fact, failure
to disclose material information, or submission of false material
information and (2) an intent to deceive the United States Patent and
Trademark Office ("PTO"). Impax Labs., Inc. v. Aventis Pharm. Inc.,
468 F.3d 1366, 1374 (Fed. Cir. 2006). Where a judgment regarding inequitable
conduct follows a bench trial, as it did here, we review the district
court's findings on the issues of materiality and intent for clear error.
Id. at 1375. The ultimate decision regarding inequitable conduct is
reviewed for abuse of discretion. Id.

Johnson's company, Clear with Computers, had licensed technology to develop
software more than a year before the critical date, and had a showing at a parts
fair, but disclose neither to the PTO during prosecution. The "district court
rejected the materiality of both the license and the public use activity at the
parts fair, and found no evidence that Mr. Johnson considered the pre-critical
date activities material but chose not to disclose them anyway."

The district court did not clearly err by finding that the Case-1H
agreement and the parts fair were not material given the evidence showing
that the invention was not ready for patenting until after the critical
date. After weighing the evidence, the court credited Mr. Johnson's
testimony, which it described as "very believable" and "candid,
straight-forward and very credible."

The district court also did not clearly err in finding no deceptive
intent based on the pre-critical date activities alone. Rather, there must
be clear and convincing evidence of "culpable" conduct. Halliburton Co.
v. Schlumberger Tech. Corp., 925 F.2d 1435, 1443 (Fed. Cir. 1991). Nor
could the district court have conclusively inferred an intent to deceive
based upon the allegedly conflicting statement to the PTO. To make an
inference of intent to deceive, the inference must not only be based on
sufficient evidence and be reasonable in light of that evidence, but it must
also be the single most reasonable inference able to be drawn from the
evidence to meet the clear and convincing standard. See Scanner Techs.
Corp. v. ICOS Vision Sys. Corp., 528 F.3d 1365, 1376 (Fed. Cir. 2008).
Here, the court found Mr. Johnson truthfully stated to the PTO that the
invention was not on sale or in public use before the critical date, despite
weak evidence of pre-critical date activity, because from Mr. Johnson's
perspective, the agreement and the parts fair did not entail the actual
invention. Because Hyundai failed to establish threshold levels of either
materiality or intent to deceive, the district court did not abuse its
discretion in finding that Mr. Johnson did not engage in inequitable
conduct. Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d
1357, 1365 (Fed. Cir. 2008) ("If a threshold level of intent to deceive or
materiality is not established by clear and convincing evidence, the
district court does not have any discretion to exercise and cannot hold the
patent unenforceable regardless of the relative equities or how it might
balance them.").

Dead patent, but no inequitable conduct. Damages vacated.

Posted by Patent Hawk at May 18, 2010 12:04 PM
| Prior Art

Comments

PH,

I about fell over laughing when I saw this post. Great title and graphic!